 Hi-Tech |
Hi-technology has been the cornerstone of the Estonian banking system, with Estonian Hansabank being the largest Banking-IT company in the Baltic States. According to Deloitte & Touche, Hansabank has the highest penetration of Internet banking in the world, having 120,000 Internet bank customers.
The roots of the success of banking lie in the early privatization. Estonia got rid of the last state bank in 1992. In the beginning of 1990s new banks sprouted like mushrooms after rain. The number of banks rose to 40. By now most of them have disappeared or merged with others. The last smaller banks went into bankruptcy during the Russian crisis.
Now all commercial banks are private and all of them have large institutional investors from Nordic countries. The Swedish and Finnish participation has created a lot of stability in the Estonian banking system.
Estonian banks are very well equipped. They started from zero and they could immediately absorb the best equipment and experiences.
The largest and most well known bank in Estonia and in all the Baltic States is Hansabank. The bank started in June 1991 as the Tallinn representation of another bank. "Estonia was still a part of the former Soviet Union. A couple of weeks after setting up Hansabank we had tanks in the streets of Tallinn and Mikhail Gorbachev had been detained in the coup. Later Boris Yeltsin gained control and the situation normalized," Indrek Neivelt, the 33-year old CEO of the universal banking giant describing the start of the bank. | 9 private individuals originally founded Hansabank. It started operations as an independent bank in January 1992 with 13 employees, some of them the founders. Now the Hansabank Group employs more than 3000 professional and innovative people in Estonia, Latvia and Lithuania.
In 1994 Hansabank held its 1st international share issue and in 1996 it bought a bank in Latvia, today's Hansabanka. In July 1998 Hansabank merged with the 2nd largest bank in Estonia, The Estonian Savings Bank. In autumn 1998, after the Russian financial crisis Swedish Swedbank bought 53% of Hansabank. Last July the bank started operations in Lithuania.
Hansabank controls 55% of assets and 58% of deposits in The Estonian banking market. In Latvia Hansabank is no 3. Market share in the Baltic States is around 25%.
Hansabank was the first bank in Estonia to introduce fees for Internet banking services. The bank feels Internet banking is a very valuable service and there has been continuous investing into the development of new added value functions. "I think it was a mistake that the fees were not introduced in the beginning when the Internet banking service was launched," tells Indrek Neivelt, "It is always more difficult to put a price on a service than to increase the initial price."
Neivelt says the bank wants to be the best in the Internet business and it is investing heavily into it. Profits of Hansabank were 815 million EEK last year, more than 50 million USD.
Hansabank was the first to build new quality offices for its employees. "I believe that Estonia is like the Hong Kong or Singapore of 20 years ago," Neivelt says. |
